DON HODGE MOTORS PTY LTD v LECOS PTY LTD T/as JOHN WATSON ELECTRICAL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, CLARKE and HANDLEY JJA 15 October 1990, 22 October 1990 [1990] NSWCA 55 APPEAL AND NEW TRIAL — EVIDENCE APPEAL AND NEW TRIAL — Oral contract — Defendant's agent dies before trial — Uncorroborated oral evidence of contractual terms — Need for tribunal of fact to scrutinise such evidence with care — Primary findings of Trial Judge not supported by evidence — Inconsistent findings as to credit of witnesses of both parties. held: The judgment of the trial judge was fundamentally flawed and the Court of Appeal could not retry the case on the written record because consistent findings as to credibility had never been made. New trial of action unavoidable. In re Hodgson (1885) 31 Ch D 177 Plunkett v Bull (1915) 19 CLR 544 Priestley JA I agree with Handley JA. Clarke JA I agree with Handley JA. Handley JA The appeal before this Court is from a judgment entered by Associate Judge Cowdery in favour of the plaintiff in a District Court action to recover a reasonable price for work done and materials supplied to the defendant. The work involved the provision of electrical wiring and apparatus for the lighting of the new Wagga Wagga Truck Centre for the appellant. The issue at the trial was whether the contract between the parties included a term fixing a maximum price for the work initially of $12,000 and later, of $15,000. Prior to action brought the appellant had paid the $15,000 which it admitted owing. The plaintiff sued for the unpaid balance of $23,545 on the basis of a contract to do the relevant work for a fair price on a do and charge basis. His Honour found a verdict for the plaintiff in the sum of $15,950. The contract in question was oral and there was a clear conflict of evidence at the trial as to the content of the discussions leading to the formation and variation of the contract. The only relevant witness for the plaintiff was a Mr Watson, one of its directors. The initial discussions, which on any view led to the formation of a contract, were between Mr Watson on behalf of the plaintiff and a Mr Cheney the then manager for the appellant of the Wagga Wagga Truck Centre. These discussions took place between November 1985 and January 1986. Mr Cheney died before the trial but a statutory declaration and a handwritten statement of his were received in evidence. There was a conflict between the evidence of Mr Watson and the contents of the declaration and statement of Mr Cheney as to whether or not a maximum price had been agreed upon between them. Evidence of contacts and conversations between late February and June 1986 was also given on behalf of the defendant by Mr Hodge its managing director, his secretary Bronwyn Croucher, and by Messrs. Forrest, Scifleet and Creagh. 2 UNREPORTED JUDGMENTS Dealing with the first period his Honour noted that there were some inconsistencies between the statutory declaration and handwritten statement by Mr Cheney and for reasons which he gave he preferred the evidence in the statutory declaration. He then went on to say that he saw no reason not to accept the evidence of Mr Watson as to the conversations and dealings he had with Mr Cheney in November 1985 and January 1986. His Honour then said: "The evidence of conversations and contact from the end of February on is in stark conflict. There is indeed, as counsel submitted, no room for reconciliation of the accounts of various conversations given by Mr Watson on the one hand and the defendant's witnesses on the other." His Honour resolved the conflict by finding that where the defendant's witnesses' evidence conflicted with that of Mr Watson he preferred the evidence of the defendant's witnesses. He had earlier found that Mr Watson was mistaken as to the dates of the first two meetings between himself and Mr Hodge and that his evidence as to the dates on which various events took place where the date could not be fixed by reference to some document was "generally unsatisfactory". In the result his Honour found that there had been discussions between Mr Watson and Mr Hodge at one of which Mr Forrest was present, and some discussions involving Miss Croucher in the course of which reference was made initially to a maximum figure of $12,000 and later to a maximum figure of $15,000. His Honour held however that those figures were given by Mr Watson "as an estimate or expectation that he had which was subject to confirmation" and he was satisfied from the evidence of Mr Hodge that he accepted these figures on that basis. In the result therefore his Honour found that the contract between the parties was that the plaintiff would do the electrical work required by the defendant for a reasonable price on a do and charge basis. Mr Toomey QC for the appellant submitted that having rejected the evidence of Mr Watson and preferred the evidence of the defendant's witnesses as to the conversations and events from late February 1986 onwards his Honour should then have rejected Mr Watson's evidence as to the discussions with the late Mr Cheney in the earlier period. In Mr Toomey's submission the acceptance by the trial judge of the evidence of Mr Watson as to his conversations in the earlier period when he could not be contradicted by a living witness could not stand with the rejection of Mr Watson's evidence as to the events in the later period where he was contradicted by living witnesses whose evidence was accepted by the judge. The claim by the plaintiff was based upon an oral contract between Mr Watson and Mr Cheney. The claim is therefore analogous to a claim against a deceased estate which depends upon the uncorroborated oral evidence of the plaintiff. There is no legal requirement that oral evidence called for the plaintiff in such cases should be corroborated. (See In re Hodgson (1885) 31 Ch D 177 at 183), but Courts have stressed the need for caution before accepting such evidence. Thus in Plunkett v Bull (1915) 19 CLR 544 at 548-9 Isaacs J said: "...dt is established that in cases of this sort the Court scrutinises very carefully a claim against the estate of a deceased person... to see whether it is true or untrue." UWRQN HODGE MOTORS PTY LTD v LECOS PTY LTD T/as JOHN WATSON ELECTRICAB (Handley JA) There is considerable force in Mr Toomey's submission, and if nothing more appeared this Court may have given effect to it. However there is more because the trial judge did not fully accept the evidence of the defence witnesses as to the events and discussions after late February 1986. Thus Mr Hodge swore and his evidence was corroborated by Mr Forrest, that at a meeting on the site in March Mr Watson said: "Don, I guarantee it will be no more than $15,000 to complete Stage I of the job outside." The defendant's witnesses gave other evidence of maximum oral quotes having been given by Mr Watson in unequivocal terms and many promises by him that he would confirm such oral quotes in writing. Mr Cheney's statutory declaration and handwritten statement were to similar effect. On the other hand Mr Watson denied all such conversations and gave evidence that he had never given any maximum quote or even estimate of the total cost of the work to the defendant's representatives. It was this conflict of evidence which his Honour had described as "stark" and which he had also said allowed "no room for reconciliation". Nevertheless having found that Mr Watson had referred in his discussions with the defendant's representatives first to a range of costs between $10,000 and $12,000 and later to a range of costs between $12,000 and $15,000 his Honour proceeded to hold that these references were given and accepted as nonbinding estimates and that no maximum quote had ever been given by the plaintiff. These findings involved the rejection of Mr Watson's evidence that he had never given any estimates of cost and had never mentioned the figures in question, but also involved the rejection of the evidence of the defendant's witnesses, and in particular Mr Hodge and Mr Forrest who had sworn that Mr Watson had guaranteed that the cost to complete Stage I would not exceed $15,000. In my opinion there was no evidence to support such findings. They were not supported by the evidence of Mr Watson who swore that he had never given maximum quotes or even estimates for the total cost of doing the work and they were not supported by the evidence of the defendant's witnesses who had sworn that such figures were mentioned and guaranteed by Mr Watson as being the maximum cost of doing such work. The findings involved the rejection of Mr Watson's evidence and the acceptance of some of the evidence given by the defendant's witnesses. However they also involved the rejection of significant parts of the evidence of those same witnesses, particularly the evidence of the "guarantee" conversation earlier referred to. No witness or combination of witnesses deposed to conversations about nonbinding estimates such as found by his Honour. While it is open to a trial judge to accept parts of the evidence of a witness while rejecting other parts the primary findings arrived at on such a basis must be coherent and must themselves be supported by evidence. As I have already demonstrated the findings made by the trial judge in the present case as to the content of the conversations between the parties from late February to June are not supported by the evidence or any part of the evidence of any witness and cannot be supported by any process of selective acceptance and selective rejection of such evidence. These findings in fact represent a compromise between the evidence given by Mr Watson on the one hand and by the defendant's witnesses on the other but a compromise which is unsupported by any evidence. 4 UNREPORTED JUDGMENTS This Court is therefore confronted with a situation where, with respect, the trial judge has made findings as to Mr Watson's credit in the early period and in the later period which are inconsistent, but has also made inconsistent findings as to the credit of the defendant's witnesses in the later period and has made findings which are unsupported by any evidence. In my opinion the judgment of the trial judge is therefore fundamentally flawed. This Court cannot possibly re-try the case on the written record because of the stark conflict between the oral evidence for the parties that has previously been referred to, because the contract sued upon is wholly oral, because consistent findings as to credibility have never been made and because this Court is not able to make such findings. However regrettable the result, this Court has no option but to order a new trial of the action. The Court therefore makes the following orders: Appeal allowed. Verdict and judgment for the plaintiff set aside. Direct that there be a new trial of the action. The respondent must pay the costs of this appeal and is to have a Certificate under the Suitor's Fund Act if appropriately qualified. 5. The costs of the first trial are to abide the outcome of the second trial. RYN Counsel for the Appellant: B. TOOMEY QC and DT KENNEDY Counsel for the Respondent: TDF HUGHES QC and RHB WOOD Solicitors for the Appellant: MATTHEWS WILLIAMS, FORBES Solicitors for the Respondent: WALSH and BLAIR WAGGA WAGGA